US regulators approve efforts to address climate risks
WASHINGTON (AP) – US financial regulators on Thursday approved a series of measures to deal with the dangers that climate change …
WASHINGTON (AP) – U.S. financial regulators on Thursday approved a series of measures to tackle the dangers climate change poses to the nation’s financial system.
The Financial Stability Supervisory Board, which is chaired by Treasury Secretary Janet Yellen and includes Federal Reserve Chairman Jerome Powell, acknowledged in a report that climate change is a serious economic threat.
“Climate-related impacts in the form of warming temperatures, rising sea levels, droughts, forest fires, intensifying storms and other climate-related events are already imposing significant costs on the public. the public and the economy, âthe council’s 133-page report reads. âIt is the responsibility of the board and its members to ensure the resilience of the financial system to climate-related risks.
The report includes more than 30 proposals to improve risk assessment efforts. He offered recommendations for improving the collection of risk data as well as ways to ensure that the public has access to the data.
The report was released 10 days ahead of a United Nations climate change conference in Glasgow, Scotland. It signals the Biden administration’s intention to tell the entire international community that it is putting in place the political architecture to tackle climate change and improve the resilience of financial markets.
With the United States lagging behind the European Union and the United Kingdom in responding to economic threats from climate change, the administration hopes to use the report to further assert its leadership on the issue.
As recommended by the report, a special advisory committee would be made up of scientists, Wall Street leaders, business and labor leaders, environmentalists and others to help develop standards for monitoring the economic impacts of change. climate.
The report also advises identifying and filling data gaps to assess how climate change could threaten the economy, including data sharing within the federal government and with its international counterparts.
The board approved the creation of two climate advisory committees that will report to the group on a regular basis to keep officials informed of progress.
Businesses and government agencies would also have new standards for public climate disclosures, a measure designed to make it easier for markets to weigh the impacts of climate change and the potential savings resulting from reducing those impacts through measures. such as the use of renewable energies. .
Yellen called the FSOC-approved changes “an important first step,” but said they were by no means the end of the group’s efforts to better integrate climate threat assessment into the regulatory process.
She said severe weather events this summer, from wildfires in the west to Hurricane Ida along the Gulf Coast, demonstrated the need for action.
Powell, calling climate change a “significant challenge for the global economy and the financial system,” said the Fed was determined to do its part in areas such as using more sophisticated analysis to better assess risks climatic.
Yellen has made tackling climate change a top priority since joining the Biden administration.
Environmental groups, however, said they were disappointed the FSOC did not make more ambitious recommendations.
âFinancial regulators can and should act to curb Wall Street’s contributions to the climate crisis,â said Ben Cushing, director of the Sierra Club’s fossil-free fundraising campaign. “This report is a step in the right direction, but bolder action by regulators is needed to protect our economy from the climate crisis.”
The FSOC is a panel made up of the heads of the main government financial regulators. It was created by Congress in 2010 to address serious interagency coordination issues that had been exposed by the 2008 financial crisis.
The report and its recommendations were approved by all panel members except Jelena McWilliams, director of the Federal Deposit Insurance Corp., who abstained on the grounds that she felt she needed more information. before reaching a conclusion. McWilliams was appointed to the FDIC by then President Donald Trump.
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